Good news for economy: Factory production growth more than doubles in July

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Updated: September 12, 2019 6:25:54 PM

Even as economy reels under a slowdown, the Industrial production growth picked up to 4.3 per cent in July, the government data showed.

Factory output, as measured in terms of Index of Industrial Production (IIP), had expanded 6.5 per cent in July 2018, indicating the growth slipped to 4.3 per cent in July, 2019.

Even as economy reels under a slowdown, the Industrial production growth picked up to 4.3 per cent in July, the government data showed. The factory output grew at 4.3 per cent in July 2019, improving from 2 per cent in the previous month. The cumulative growth for the period April-July 2019 over the corresponding period of the previous year stands at 3.3 percent, the government data showed. Meanwhile, factory output, as measured in terms of Index of Industrial Production (IIP), had expanded 6.5 per cent in July 2018, indicating that the growth slipped to 4.3 per cent in July, 2019. Analysts polled by Reuters had forecast a reading of 2.3 per cent for July. In terms of industries, thirteen out of the twenty three industry groups in the manufacturing sector have shown positive growth during the month of July 2019 as compared to the corresponding month of the previous year.

“While the IIP growth recorded an improvement in July 2019 relative to the previous month, this trend is likely to be short-lived. Early data reveals a contraction in the output of Coal India Limited and automobiles, as well as electricity generation in August 2019, suggesting that the next IIP print is likely to be muted. Given the disappointing trends revealed by the high frequency data available for August 2019, we should not conclude that a recovery is underway based on the pickup in industrial growth in July 2019,” Aditi Nayar, Principal Economist, ICRA said.

Meanwhile, retail inflation inched up to 3.21 per cent in August as against to 3.15 per cent in July. However, it was lower than economists’ estimates but marked the highest level recorded since October 2018.

Also read: Retail inflation at 10-month high; food prices surge in August

The Indian economy is facing a slowdown for sometime now with the consumption demand seeing a new dip. The private sector companies has even asked for a stimulus from the government to boost the sagging economy. In the first quarter of FY19, the GDP printed a dismal growth of 5 per cent, largely on account of weakness in manufacturing.

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